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Trustee has fiduciary duties to the beneficiaries of the trusts

One common occurrence in estate matters happens when the parents have placed one child in charge of a trust or the estate administration, and that individual plays it tight to the vest, not offering sufficient information to the other siblings to keep them satisfied. With respect to revocable trusts in Texas the trustee does have certain obligations to the beneficiaries. For starters, the trustee is a fiduciary to the beneficiaries, which entails a duty to act reasonably, ethically and prudently on their behalf.

A trustee is often also a beneficiary in a family-style trust, which makes it personally important to the trustee that the assets be administered with care and in a successful manner. However, when a trustee forgets his or her role as a fiduciary, the trustee can sometimes become secretive or nonresponsive to the beneficiaries inquiries for information. Most trust will require the trustee to make an annual accounting to the beneficiaries so that each beneficiary should know the status of the estate, the balance in the accounts and the transactions that have taken place, along with other basic financial facts.

A beneficiary can inquire about trust matters and should be provided with an updated report. A beneficiary can object to significant transactions by the trustee, and can dispute a matter by filing litigation against the trustee. The trustee can act with respect to real property and other trust assets according to the terms of the trust. As a practical matter the trustee should get the approval of all transfers of real estate and the disposal or transfer of significant accounts prior to doing it.

In Texas, revocable lifetime trusts set forth in the trust instrument the precise duties of the trustee and procedural powers, duties and limitations. The starting point in inquiring about trust matters is to look first at the trust instrument itself. If you have a difficult problem regarding a trust in Texas, the primary way to get authoritative answers is to consult with experienced trusts and estates counsel.

Source: The Sacramento Bee, "Ask the Experts: Trustee of an estate can have broad powers," Carlena Tapella, May 15, 2013

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